Should investors mimic the trading patterns of CEOs?

|By:, SA News Editor

Research from S&P Capital IQ shows that in the six months through October, stocks of Russell 3,000 companies in which the CEO was a net buyer of shares performed an average of six times better than the index in the five days after the trade was publicized. The stocks also did better than the Russell 3,000 in the month and three months afterwards.

However, results for CEO sales are less conclusive. And while there was a strong link between CEO acquisitions and share-price performance in 2008 and 2009, it reversed last year.

One company boss who has done particularly well is Insys Therapeutics' (INSY) Michael Babich, who bought 1,000 shares in mid-August at $24.90. The stock is now worth $41.14.